Cournot duopoly and environmental R&D under regulator’s precommitment to an emissions tax

This study examines the environmental R&D (E-R&D) of Cournot duopolists with end-of-pipe technology under a regulator’s precommitment to an emissions tax. Under technological spillover effect, the government invariably prefers E-R&D cartelization to E-R&D competition. Highly contrary to earlier studies, consumer surplus is not necessarily maximized by environmental research joint venture cartelization, although this offers private and social incentives.